Notice of Special General Meeting


 
TIDMZIP 
 
12 May 2009 
 
                                  Zone-IP Ltd 
 
                         (`Zone-IP' or `the Company') 
 
                                   (LSE:ZIP) 
 
Availability of the report and accounts, notice of special general meeting and 
             proposed cancellation of admission to trading on AIM 
 
Zone-IP announces that it has posted a notice of a special general meeting (the 
"SGM") as well as the Company's 2008 Report and Accounts to the Company's 
shareholders today. 
 
The SGM will take place on 17 June 2009 at 10.00 am (London time) at the 
offices of John East & Partners Limited, 10 Finsbury Square, London EC2A 1AD, 
UK. 
 
At the SGM, the Company's shareholders (the "Shareholders") will be requested 
to consider and vote on the proposal to cancel the admission of the Company's 
ordinary shares to trading on the AIM market of the London Stock Exchange ("AIM 
"), in accordance with Rule 41 of the AIM Rules. Under Rule 41 of the AIM 
Rules, the adoption of such resolution is subject to the approval of holders of 
at least 75 per cent of the Company's share capital represented and voted at 
the Meeting. If Shareholders approve the proposed resolution, it is expected 
that the cancellation of the admission will take place at 7 a.m. UK time on 24 
June 2009. 
 
In the past two years, there has been very limited trading in the Company's 
shares. Since 1 January 2008, only 321,301 ordinary shares of the Company have 
been traded on the market, representing 0.63 per cent. of the issued share 
capital of the Company, at a total monetary value of under GBP22,750. At the same 
time, the Company has been incurring significant costs and expenses relating to 
its listing on AIM, including fees paid to the Company's nominated adviser and 
broker and the registrar, annual fees paid to AIM, costs relating to public 
announcements and certain fees and expenses of directors and legal counsel 
fees. The Directors believe that, in light of the foregoing, it is in the best 
interests of Shareholders to cancel the admission of the Company's shares to 
AIM, thereby significantly reducing the Company's costs and expenses. 
 
Shareholders should note that cancellation of admission is likely to reduce 
significantly the liquidity and marketability of the Company's shares and 
Shareholders will no longer be able to effect transactions in the Company's 
shares on market. Following cancellation, the Company intends to terminate the 
Depository Agreement entered into between the Company and the Depository (the 
Issuer of Depository Interests), Capita IRG Trustees Limited ("Capita") on 3 
May 2005 (the "Depository Agreement"). Such termination shall take effect 45 
days following the Company's notice to Capita of termination. Upon termination 
of the Depository Agreement, the Depository Interest facility maintained by 
Capita will be disabled and a share certificate will be despatched to each of 
the Depository Interests holders. 
 
In the event the resolution to cancel the admission of the Company's ordinary 
shares to AIM is approved as proposed, the Meeting will be adjourned until the 
cancellation of admission of the Company's shares to trading on AIM is 
completed, which is expected to occur on 24 June 2009. Thereafter, the Meeting 
will be re-convened to consider the following: 
 
1. An amendment of the Terms of Remuneration of Mr. Tal Barnoach, the Executive 
Vice-Chairman of the Company's Board of Directors 
 
Conditional upon the cancellation of admission of the Company's shares to 
trading on AIM becoming effective as proposed above, the Shareholders will be 
requested to consider and approve an amendment to the terms of remuneration of 
Mr. Tal Barnoach, the Executive Vice-Chairman of the Board, for each of the 
years 2008 and 2009. 
 
2. Indemnification undertakings 
 
Conditional upon the cancellation of admission of the Company's shares to 
trading on AIM becoming effective as proposed above, the Shareholders will be 
requested to consider and approve the entering by the Company into 
indemnification agreements with each of its current and future directors. 
 
3. Insurance of Directors 
 
Conditional upon the cancellation of admission of the Company's shares to 
trading on AIM becoming effective as proposed above, the Shareholders will be 
requested to consider and approve the purchase by the Company from time to time 
of an insurance policy covering the actions and omissions of its current and 
future directors. 
 
4. Amendment to the Articles of Associations 
 
Conditional upon the cancellation of admission of the Company's shares to 
trading on AIM becoming effective as proposed above, the Shareholders will be 
asked to approve and adopt certain amendments to the Company's Amended and 
Restated Articles of Association (the "Articles"), according to which Sections 
5.3 and 5.4 of the Articles, which provide for certain preemptive rights for 
the Shareholders, shall be deleted and such preemptive rights shall be 
cancelled. 
 
5. Approval of offer letters 
 
On 30 December 2008, the Company announced that it had entered into a loan 
agreement with Emblaze Ltd. ("Emblaze"), the holder of 64.8 per cent. of the 
Company's issued share capital, pursuant to which Emblaze granted the Company a 
non-interest bearing loan of US$909,536 (net of US$28,793 previously owed by 
Company to Emblaze as a result of a reimbursement agreement between the parties 
dated 01 January 2007) (the "Loan"). The Loan is unsecured and is repayable on 
25 December 2013. 
 
In addition, Hans Wagner, Chairman, and Tal Barnoach, Executive Vice-Chairman, 
each entered into loan agreements with the Company of US$279,253 and US$93,084 
respectively (the "Director Loans"). The Director Loans are also each unsecured 
and repayable on 25 December 2013. 
 
Prior to execution of the Loan and the Director Loans, the Company became in 
urgent need of immediately available funds and therefore approached Emblaze, 
Mr. Barnoach and Mr. Wagner (the "Lenders") to request an immediate funds 
injection in the form of a loan. 
 
Due to the uncertainties over future trading and the Company's ability in the 
future to raise equity capital or other funding to enable the Company to repay 
the Loan and the Director Loans, the independent directors of the Company, 
Amira Paz, Assaf Medina and David Blass (the "Independent Directors"), believe 
that it will be in the Company's best interests to amend the terms of the Loan 
and the Director Loans entered into on 5 December 2008 by the Company and each 
of the Lenders, such that the Loan and the Director Loans shall become 
convertible under certain circumstances. 
 
Further information on all of the resolutions can be found in the notice of 
SGM. A copy of the notice of SGM and related circular is available on the 
Company's website, www.zone-ip.com. 
 
Shareholders should be aware that, if the resolution to approve the 
cancellation is passed, there will be no facility to buy or sell the Company's 
shares on any exchange with effect from 24 June 2009. 
 
Enquiries: 
 
Zone-IP Ltd. 
 
Hagit Gal                              +972 9 7699339 
 
John East & Partners Limited 
 
David Worlidge                         + 44 20 7628 2200 
 
 
 
END
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